Video: Who pays the cost of hunger? As food prices rise, many of us can give up desserts or meat once or twice a week to save money. For people making less than US$ 1 a day, the choice is much harder. 2008. World Food Programme

Skyrocketing food prices sparked riots in more than 40 countries and grabbed headlines in the first half of 2008. While media coverage of the world’s food crisis has since been overshadowed by international alarm over the global financial crisis, the access of poor people to food is worsening. Growing numbers of people are falling into the ranks of the hungry as the economic downturn closes factories, bankrupts companies and shrinks household incomes. At the same time, domestic food prices are still higher than they were before the world food crisis, exacerbating the problems of declining income and employment.

The Story

Volatile prices and the global financial crisis, coupled with the dramatic decline in agricultural investment over the past 30 years, have sharply reduced food security in many developing countries. While international food prices have fallen from peak levels of 2008, prices in many developing countries remain high, at record levels in some cases. The United Nations Food and Agriculture Organization (FAO) estimates a record one billion people – or one-sixth of the world’s population – now go to bed hungry, without sufficient calories to live a healthy life.

“A dangerous mix of the global economic slowdown, combined with stubbornly high food prices in many countries, has pushed some 100 million more people than last year into chronic hunger and poverty,” says FAO Director-General Jacques Diouf.

Based on current trends, international targets to cut world hunger and poverty in half by 2015 appear increasingly out of reach. FAO has called for a broad international effort to eradicate world hunger, warning the “silent hunger crisis” is posing a grave threat to world peace and security.

With more than 9 billion mouths to feed by 2050, significant improvements in agricultural production and increasing food access in developing countries will be ever more critical. The global financial crisis has prompted fears that efforts to raise much needed investments in agriculture will be set back further. Already the share of total official development assistance (ODA) for agriculture has tumbled from 17 percent in 1980 to just 3.8 percent in 2006.

About 75 percent of the world’s poorest people live in rural areas and depend on agriculture for their livelihoods. To increase production, smallholder farmers must have greater access to credit, seeds, fertilizers and secure land tenure. FAO estimates that the countries hardest hit by the food crisis, most of them in Africa, will need at least US$ 30 billion annually to ensure food security and revive long-neglected agricultural systems.

UN Secretary-General Ban Ki-moon has called on the international community to urgently address the food crisis in developing countries – both through short-term emergency measures to meet critical needs and longer-term investments to promote food production and agricultural development.

The Context

The UN Food and Agriculture Organization (FAO) estimates that more than one billion people in the world now suffer from hunger and malnutrition, compared to about 825 million people in 1996.

International wheat prices more than doubled in the span of a few months in 2007/08 in response to tightening world supplies and strong demand, as did prices for rice and maize. Fast-growing demand for biofuel production contributed to these price surges.

FAO launched the Initiative on Soaring Food Prices as early as December 2007 to help vulnerable countries boost food supplies and provide policy support to improve access to food. FAO is currently engaged in more than 90 countries, supporting food production with the supply of improved seeds, fertilizers, other agricultural inputs and technical assistance. Nearly 7 million smallholder farmers and their 35 million dependents have directly benefited from this support.

The combination of higher export prices and soaring freight rates pushed up domestic prices of bread and other basic foods in importing developing countries, hitting the poorest particularly hard and causing social unrest in a number of countries. Even after declines in cereal export prices due to the financial crisis, domestic prices for essential foods in the first half of 2009 remained about 20 percent higher than two years ago, even after adjusting for inflation.

On 28 April 2008, the United Nations Secretary-General established a High-Level Task Force on the Global Food Crisis under his chairmanship. The task force has produced a Comprehensive Framework for Action to guide global and local actors, both institutions and governments, and to catalyze urgent and immediate action.

In June 2008, world leaders and policymakers from 181 countries gathered at FAO Headquarters in Rome for the High-Level Conference on World Food Security, which called on the international community to increase assistance for the world’s poorest countries.

FAO puts the economic cost of hunger, in terms of both resources needed to deal with its effects and the value of productivity and income losses, at hundreds of billions of dollars a year. In this light, public spending on reducing hunger is an investment with very high returns, a tremendous potential benefit, which has not been sufficiently recognized by developing country governments and development partners alike.